The pain of VAT increases announced in this week's Budget – which will push up the cost of holidays in Britain in particular – has at least been put off until early next year. The announcement of a review of airport departure tax raises more questions than it answers, although increases seem virtually certain. But whatever you thought about the Chancellor's announcements, it is extremely unlikely that you have been left feeling richer. And you probably feel even more in need of some kind of a holiday this summer. So, with austerity in mind, here are my top 12 tips on how to save money when booking a holiday and while travelling this summer.

1. Travel at the end of the summer

If you haven't yet booked and have school-age children, you will find that package holiday prices – as well as hotel and accommodation rental rates – dip by about 20 per cent if you avoid the summer peak and book for the last week of August. Thanks to a late August bank holiday this year, many schools will not restart until September 6 or later, so there is more room for manoeuvre than usual. Good bets for last-minute discounts include Spain – where the huge choice of flights and accommodation is keeping prices down – and Greece, where unrest over government austerity cuts seems to have calmed, and the country is desperate to attract tourists.

2. Swap houses

Assuming you live in an area or a city that might appeal to visitors from abroad, a good way to reduce accommodation costs is to arrange to swap homes. This has the added advantage that you won't be leaving your house unoccupied while you are away. Although there is a small administration charge to make the arrangement through an agency, it's safest, and you will have more choice. Try Homebase (www.homebase-hols.com), Home Link (www.homelink.org.uk) and Intervac (www.intervac.co.uk)

Whether you stay in Britain or fly to Turkey or Greece, self-catering apartments or cottages nearly always offer the best value in accommodation. They generally work out cheaper than hotel rooms and give you far more space for your money. They can even work out cheaper than camping. In France, for example, a couple of weeks for a family of four in a ready-pitched tent on a big site with lots of facilities could easily cost you more than £1,200, a mobile home more than £2,000 (including ferry crossings). You could get more space for less money by renting a gîte. A two-bedroomed cottage in Brittany costs from about £900 for two weeks, also including ferry crossings (see www.brittany-ferries.co.uk, for example).

4. Take your own tent

If camping is important to you – and it's true that you can often get a better location, especially for seaside holidays, than you can in a gîte – then it will be much cheaper to take your own tent than to use the ready-pitched variety. For camping options across Europe, see http://travel.alanrogers.com

5. Save money at the airport

The key lesson here, whether you are looking for parking, an airport hotel, or even access to an executive lounge, is to book online well before your departure date. If you need both parking and a hotel, search for offers that include both. Recently, I have found the airport websites themselves – especially www.baa.com, which covers airports including Heathrow, Stansted, Edinburgh and Glasgow – to have competitive rates for parking and hotels, but it is worth checking independent specialist sites such as BCP (www.parkbcp.co.uk) for parking and Holidayextras (www.holidayextras.co.uk)

6. Minimise airline luggage charges

The ever-increasing charges for hold baggage levied by most no-frills airlines often add up to more than the basic fare. Ryanair now charges £20 (or €20) each way for a 15kg bag paid for in advance online for flights in July and August. A 20kg bag costs £30 (or €30) one way. If you turn up at the airport without having booked and paid online, the charges are even higher. There are three rules that could save you money here:

Make full use of the carry-on baggage allowance (usually between 5kg and 10kg per person) – though make sure your bags meet the maximum size and weight restriction (these vary; check details on the airline website).

Pack to minimise the number of bags you have to check in.

Book hold baggage online well before the departure date.

7. Beware of car hire extras

The biggest expense you are likely to face at your arrival airport is the extras slapped on to your car hire bill – extras for additional insurance, child safety seats, a second driver, and so on, that you might not have realised you were going to have to pay. The simple rule here is to read the small print when you book; it's easier and cheaper than reading it when you arrive. The heftiest charge is likely to be to waive any excess you have to pay if you damage the car. It's much cheaper to cover this risk with a specialist insurer such as www.insurance4carhire.com or www.carhireexcess.com; book before you leave Britain.

8. Take the slow road

If driving through France, you will save significantly by avoiding the motorway tolls. As I pointed out last month, a 650-mile drive down the length of France from Calais to Aix-en-Provence takes about nine hours using the autoroutes, and will cost €74 in tolls. Avoiding toll roads will add about six hours to the journey. If you don't have a satnav, good sites for route planning are http://maps.google.com, www.mappy.com and www.viamichelin.co.uk

9. Avoid the cameras

Speed cameras have proliferated on the Continent as well as in Britain. In France, in particular, they are well hidden, especially near the entrances to towns and villages. Getting caught will add significantly to your holiday budget. The spot fine for exceeding the limit in France by up to 20km is €68 (but €135 if the relevant limit is lower than 50km/h). The fines for greater infringements rise to €1,500 and can involve a court case. Beware.

10. Fill up on the right side

If you are crossing the Channel to France, you will find it cheaper to fill up with petrol in Britain but with diesel in France. According to a recent survey by the Post Office, unleaded petrol on this side of the Channel costs about £1.23 per litre, but £1.27 on the other side. Diesel is slightly cheaper over there (£1.18) than here (£1.23).

11. Eat at lunchtime

The great thing about being on holiday is that your time is – for once – your own. So, if you enjoy eating out, you can linger over lunch and sleep it off in the afternoon. This tactic will also save you money, especially in more expensive restaurants, where lunchtime menus are often half the price of dinner ones.

12. Pay with a credit card

This advice works only for those who pay off their card balance every month. If you do, you will find that the most cost-effective way to spend money is to use that card as much as possible. You won't lose out on the charges and exchange rates for buying cash, or for using a debit card. However, be wary of the recent new trait whereby vendors overseas offer to process the payment in pounds. This will have been ready converted at a rate that is likely to be inferior, so make sure you are charged in the local currency.